The US consortium has sought maintenance fees to keep its equipment and infrastructure of LNG terminal running until the country starts importing the liquefied natural gas (LNG), a top government official said.
The consortium comprising Astra Oil and Excelerate Energy in its final letter last week also agreed to pay US$2.0 million as bid bond for building the country's first LNG terminal at Moheshkhali island in the Bay of Bengal.
The consortium also agreed to pay penalty in case of its failure to provide required services after the import of LNG, a senior official of Energy Division under the Ministry of Power, Energy and Mineral Resources (MPEMR) told the FE.
The US consortium in its letter to state-owned Petrobangla also agreed to provide US$20 million as performance guarantee in line with tender requirements, he added.
Although the country signed a memorandum of understanding with Qatar on the import of LNG, it is yet to sign any deal to import LNG, which prompted the US consortium to seek the maintenance fund of the terminal until start of LNG import. The country has extended its MoU with Qatar for LNG import until June 2015.
It signed the MOU with Qatar Petroleum in January 2011. Under the MoU the country intended to import 4.0 million tonnes of LNG every year, which was set to expire in March 2013.
Everything would, however, be settled within the next couple of months after negotiation, he added.
Astra Oil and Excelerate Energy consortium was selected primarily as the lone bidder to build the LNG terminal in August 2012.
In its initial bid, the US consortium sought $0.39 per Mcf (1,000 cubic feet) as a processing fee to cover the installation cost of the LNG terminal.
It also had sought engineering, procurement and construction (EPC) contract fees and credit support.
It was initially not interested to pay a $20 million performance guarantee that was part of the tender requirement.
Petrobangla floated the construction tender of LNG terminal in November 2010, and selected 'conditionally' the US consortium comprising Astra Oil and Excelerate Energy.
But inking of deals for awarding of the project work was delayed due to factors such as procedural delays and lack of funds.
After a long delay over implementation of the project, the government in January 2014 has put the country's first LNG import terminal project on a fast-track route for implementation on a priority basis.
The EMRD subsequently directed state-owned Petrobangla to quicken implementation of the project.
Petrobangla in February re-invited the US consortium to visit Bangladesh and negotiate over the project work.
Petrobangla is planning a floating LNG import terminal with a capacity to handle 5 million tonnes per year of LNG and a re-gasification capacity of at least 500,000 Mcf per day at Moheshkhali Island in the Bay of Bengal.
It would have berthing and mooring facilities for LNG vessels with a capacity of 138,000-260,000 cubic meters, with Petrobangla looking to award the construction contract on a build-own-operate-transfer basis for 15 years.
Building the LNG import terminal is critical for the energy-starved southeastern Chittagong region.
Chittagong, which was once almost self-reliant in natural gas, started facing a supply crisis in 2006 as output diminished from the Sangu gas field.
The offshore Sangu-11 gas well near Chittagong was permanently shut on October 1, 2013.
US consortium seeks maintenance fees
M Azizur Rahman | Published: April 03, 2014 00:00:00 | Updated: November 30, 2026 06:01:00
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